Verizon Communications Unfolds Earnings For 4QFY15

The last quarter's financial statements highlight the potential of the top telecommunication company.

On Thursday morning, January 21, 2016, Verizon Communications Inc. reported its earnings for the 4th and last quarter of 2015. The top telecommunication outperformed in the last quarter and met the Street’s expectations.

The company, which is headquartered in New Jersey, declared $0.88 earnings per share –0.01% more than the speculated amount and reported a 25% increase in EPS as compared to last year’s (4Q14: around 70 cents). The company’s Chairman and CEO, Lowell McAdam was confident on the company’s performance and said that the company has generated balanced result amidst the strong competition. Furthermore, the CEO said that the company looks forward to perform better in the coming year as it has attained and built next generation network capabilities that position the pioneer in the digital-first mobile world in 2016.

The US based company also surprised the analysts when it managed a net addition of 1.5 million customers in the last quarter. Moreover, the organization’s rate of customer’s attrition, or defection, fell down to 0.96% -significantly better as compared to last year’s 1.14%.

For the year quarter, the company reported revenue of $34.3 billion –a 3.2% increase as compared to the last year’s same quarter. In comparison with last year’s same quarter loss of $2.2 billion, the carrier generated a profit of $5.4 billion in the last quarter.

The New Jersey giant has expanded its horizon and invested in lot of different ventures in order to generate more revenue for the company. The organization has made an investment of $28 billion in spectrum licenses and capital for future network capacity. Moreover, the company spent $4 billion in acquisition of AOL Inc. in an attempt to create a digital advertising business.  

The top performing telecommunication company views the acquisition of AOL Inc. and Millennial Media as a prudent step that will strengthen company’s capabilities of developing and introducing high-tech applications to its customers. For example, last year, the company has launched a mobile video app with a name of “go90.” Also, it looks forward to develop technology platform for new machine-related businesses.

Because of the new incentives which the company is looking into, the company believes that the coming year  will be a tough one. Verizon’s CEO, Fran Shammo expressed his views and told the analysts that just like any new business which initially withstood losses and then gradually begins making profit, Verizon too will have a hard time in executing its new plans and strategies. He commented that he believes go90 will take a few years to generate higher returns for the company. Reportedly, the video app has managed to gain 2 million downloads since its launch in October but no official statement was given by Verizon to verify its active monthly users.

Without a doubt, the company has gone under a transformational change in 2015 and it is highly probable that in 2016 Verizon will be set out to the road of success.

The Verizon stock price stood at $45.87 –an increase of almost 3.3% at the marked which closed on Thursday.   

   

Verizon Communications Earnings Per Share (EPS) Expectations

Verizon Communications is publishing its Q4 financial statements and analysts are keen to find out whether the company has met their expectations.

On Thursday, January 21, 2016, Verizon Communication is set to put forward the company’s fourth-quarter financial statements. Analysts have forwarded different speculations about the organization’s revenue and earnings per share.

According to Thomas Reuters, the top telecommunication company is expected to have $0.88 earnings per share – a 23% increase as compared to the same quarter last year (2014:$0.77). The analysts expect the business to earn revenue of $34.06 billion – around 3% more than the same quarter of last year’s (2014:$33.19 billion) while the full-year revenue of the business is expected to be $131.5 billion – a 3% increase as compared to last year’s (2014:$127.1 billion).

Analysts are also confident that the New York based company has potential to perform better in 2016. Verizon stock news gives the following picture: JPMorgan Chase & Co. has suggested an Outperform rating while lowering down the price target of its stock by almost 4% from $57 to $55. Cowen evaluated the stock at Market Perform. BTIG Research has rated the stock from “Buy” to “Neutral” while Citigroup has given “Hold” rating.

Although, the telecomm giant is expected to declare favorable financial position of the Verizon, the organization’s performance is susceptible to high competition. The Kansas based wireless accessories provide, Sprint Corp. had shaken the industry when it announced a half-price offer to its customers. The analysts are intrigued to find out whether Verizon maintained its strong subscriber growth. Analysts at Wells Fargo are confident that the company will be able to maintain their strong 1.5 million postpaid subscribers.

Eyes are all set on to see the plans of Verizon wireless business, which was earlier reported to have said that it would take part in the government’s auction of wireless airwaves. Further, FirstNet, a nationwide public safety network, requires a carrier partner. Investors are waiting to find out about company’s official view regarding the proposed plans.

People are also expecting to learn company’s stance regarding Yahoo’s anticipated sale. Initially, Verizon showed the interest in the deal but a concrete statement on the potential deal has not yet been made by the entity. Analysts are ambitious and will find out as soon as the Thursday market opens. 

The stock market on Wednesday displayed the Verizon stock at $44.45 – a 0.94% decrease. The analysts unanimously proposed a price target of $50.58 and a 52-week trading range of $38.06 to $50.86. Favorable conditions are anticipated ahead for the business this year. 

Apple App Store Generates Significantly More Revenue Than Google Play Store

Apple App Store boasts of stronger revenues in comparison to Google Play Store.

Alphabet’s Google Play Store had an amazing start where they observed 100% growth in contrast to Apple Inc.’s App Store as reported by VentureBeat. App Annie, which is an app analytics company, came up with their retrospective report for the fiscal year of 2015, where it was deduced that the company observed 60% growth in FY14.

Google recently launched the new smartphone series, Nexus 5X and 6P, which have resulted in growth for the app store. Moreover, it is also speculated that the Android operating system 6.9 Marshmallow might just be the catalyst for the change. The company has refined the operating system and is now simplified that might attract masses.  

However, one thing that was not part of the report was the revenues. Ironically, despite the growth of Google’s Play Store, the Apple iPhone maker has succeeded in getting 75% more revenue in comparison to Google.

Google App Store and Apple App Store now have a substantial gap. All those developers that are working for Apple tend to get more money in comparison to their counterparts. The brand has now become a status symbol among customers.

Undoubtedly, Google’s operating system is presently the most commonly used operating system in the fraternity. This has resulted in several inconsistencies due to the segmentation in the market but the Play Store has a massive consumer base. Other than that, all the users who buy an iPhone have the advantage to opt for in app purchases or paid apps.

Another factor that was highlighted in the report was that the majority of the growth in terms of the app store was observed from outside the United States. Countries that contributed significantly to the growth were Indonesia, Brazil, Turkey, India and Mexico. On the contrary, the Apple App Store observed its growth from countries like United States, Japan and China.

Apart from this, Android is likely to embrace growth this annum too. However, this growth will not act as a major revenue source and AAPL will remain the uncrowned king of the fraternity. The company is paying a lot more to the developers in contrast to Google since they are not making that much money overall.

Another factor taken into consideration is that the purchasing power of Apple buyers that is stronger than Google. Thus, revenues boost due to the purchasing power of the users who can spare out money for purchases on the App Store. 

Google Might Just Give A Tough Time To Facebook

Google app installation via its search engine might give a tough time to Facebook

Mobile application installation has become the recent bone of contention between tech giant Facebook Inc. and Alphabet Inc.

The search engine giant has started to allow some of its Android users to download the application directly via the search results which will minimize the need to browse through the Google Play Store. So far the ability has not really penetrated amongst users but it can cause substantial dent to the fastest evolving business across the globe of Facebook Inc.

Couple of years back, Facebook has come up with mobile app installation ads which make it extremely convenient for users to download and discover the applications. The app install ads feature appears directly in the Facebook users’ News Feed. A link is provided that enables the users to install a mobile application quickly. Such ads have become immensely popular amongst developers who are always looking up for ways to push downloads and make their product standout.

But now if GOOG makes it easier for downloading the apps via its search engine then there are fewer chances that people pay for Facebook advertisements. This can result in a problem for Facebook since it is enjoying robust growth through its mobile advertisement business. Analysts now believe that the app installs ads are an integral component of Facebook. Ironically, Facebook has condemned this fact claiming that a great chunk of their revenue doesn’t depend on this segment.

App search itself is a big business. Thus, Google has made a smart move to come up with several ways that will assist in making search of applications friendlier.

According to Business Insider, “The Company has started allowing users to stream app content from search without downloading an app. It also launched "trial run ads" that let users test out an app for 60 seconds before deciding if they want to download it.”  At this point of time, Google download without Play tests is merely operating via organic search than advertisements. However, the company is likely to expand in the future.

The main argument by the social media giant regarding its mobile app install is that it can target the masses on the basis of the Facebook information available on the platform. However, with Google there is another added advantage which allows the company to deduce what applications are actually being searched. This will result in better insight for the company.

Facebook needs to do something about this before it gets late. There is still some hope before game changes for them.

BP Has Announced 4,000 Job Cuts To Cover Damages From Low Product Prices

After looking at all of its options, BP plans on removing 4,000 employees in order to cover to costs and loss it is facing from the low prices of oil and gas

The giant oil and gas company has been facing damages due to the downfall of the oil industry, BP Plc. was reported to sell many of its refineries to cover the damages it has gone through, but apparently that was not enough. The London based oil business has plans of removing 4,000 of its workers internationally to save costs.

The job cuts by BP Plc. will be as huge as 4000, out of which 600 are going to be from the company’s North Sea operation. A spokesman for the business informed that such measure are being taken to make the business model and strategy simple and save costs and expenditures within the premises of safety.

The Oil and Gas Company has already warned the media and its employees that many job cuts can be expected in 2016. The oil and natural gas prices have gone down by 70% since 2014, this has damaged many companies in the industry not just BP Plc.  Even though job cuts will take place, the business has assured that in there will not be removal of job in the departments of exploration and drilling.

The London oil business currently provides 80,000 jobs globally, out of which 4,000 of these are in United Kingdom. There are plans of reducing 600 jobs in the North Sea project; regardless the business is still investing $4 billion this year in the project. It is already very well aware that the project will not be an easy one especially because of the difficult market conditions, the company will have to stay extra conscious in how it operates and run the project; every decision will play a huge impact on the business.

Such bad market conditions have led to the company making the unfortunate decision of the removal of job, contractors job cuts will be conducted by the end of next year, however the most of the of job cuts will be taking place this year. This how many organization will have to react due to downfall of the industry globally, the number of job cuts made by businesses has gone up to 250,000 and is increasing every day now.  The CEO of BP said that he wanted pay dividends without taking any loans, this idea is similar to another company, Total SA.

BP stock closed at $28.65, after going red by 0.06% on January 12.

Will Netflix Be Apple's Next Catch

As attractive as it might sound, fate is blurry for Apple to acquire Netflix

Apple Inc. has come up with the Apple TV which was considered to be the future of conventional television. The technology had the ability to revolutionize the industry. Recently, the company also planned to come up with a cable streaming package that encompassed 14 channels which would be priced lesser than other conventional services. However, the company did not succeed in maintaining healthy relationships with the streaming services because of which the company decided to abandon the service in December. Now the thing to ponder on is that the company has a cash reserve of $200 billion, so with this money should they opt for high priced proposal or acquire the streaming giant, Netflix Inc.?

For the very first time over the past couple of years, the tech behemoth considers itself in a crucial situation. In the start of 2015, Apple stock were quite lucrative but with time they dropped down to the level they were a year earlier. The market for tablets and smartphones is extremely saturated which does not have the potential to churn in revenues considering previous growth.  Other than that, the company wanted to push its wearable tech, Apple Watch but it wasn’t quite successful and the streaming service for Apple TV got abandoned.

During an interview for Bloomberg, Mr. Daniel Ives, the managing director at FBR Capital Markets claimed that the tech giant has not really made any high profile acquisition to date. The company has embraced a “make or break” situation in FY16 and it should not rely on iPhone 7 to be a game changer and churn in massive sales unless it comes up with an extremely futuristic smartphone.

The company at this point is interested in original content programming; this is exactly what Netflix is popular for through the renowned House of Cards series. So to minimize the hefty expense of coming up with its own original content programming, the tech giant can simply acquire Netflix and make use of the company’s expertise in this domain.

Netflix now seems to be an extremely lucrative company in terms of an acquisition. However, the issue is that the company’s paid content principle is actually against the iPhone maker’s policy to beam out an affordable cable streaming service for $40 to customers.

Moreover, Netflix might really not be interested in this acquisition since it is doing quite well and there is room for further growth in the times to come due to its immense popularity in the world of original content.